How XP WPA will squeeze more money out of businesses

It's the people who don't have to deal with it who'll get screwed...

Microsoft has published a "technical" bulletin on Windows Product Activation technology, but it's essentially a piece of PR fluff that doesn't tell us anything new, and that's light years away from the detailed expose Fully Licensed published a while back. Microsoft's effort was promised after that, and turns out to be just an apologia for WPA.

But it does shed some light on Microsoft's thinking; WPA is aimed at casual copying, i.e. 'normal' people sharing their software rather than professional pirates, and the document quotes estimates that this accounts for up to 50 per cent of piracy. Clearly Microsoft therefore wants to stop you lot just buying one copy of Office and then installing it on all your home PCs, giving your friends copies, etc etc. And then the money will roll in... Perhaps.

We can probably assume, it being the case that users don't have a whole lot of choice these days, that WPA will be grudgingly accepted over the next year or so. It'll come with Microsoft's main products, and most users won't bother circumventing it, particularly as it isn't actually that great a hassle. Aside from the cases of professionals and enthusiasts who need to swap hardware out a lot, Windows XP WPA will quite possibly be barely visible to users. Most operating system shipments come in the form of preinstallations on new PCs, most people don't bother upgrading these in between PC purchases, and quite a lot of the PC vendors will preactivate WPA on their machines anyway.

That does kind of make WPA on WinXP look singularly pointless. Microsoft won't make significantly more money out of OS sales, but Microsoft will piss off large numbers of techies, who'll therefore make it their business to rip the protection out and, er, won't need to buy extra copies of XP because of that.

It's a bit different when it comes to Office XP and Visio 2002. These are pricey items that don't generally come with the PC, so they're prime targets for casual copying. But their price bracket makes it far more likely that the original licensed version that's copied will have been bought by a business rather than at retail, and the volume licensed business versions of Microsoft products won't require activation in the way the retail ones do. So, as is the case today, you're running Office at work, you figure it'd be useful to have it at home, so you take it home and install it. Again, Microsoft doesn't stop much, doesn't make much extra money, so what's the point?

The company will wind up ticking off the odd home user who does buy Office at retail and discovers he's got to buy another two copies if he wants the kids' machines to have it as well, but is he then going to do so? Get real - he's a lot more likely to become a Corel or StarOffice customer, so no more money there either.

But there is a point to WPA, one that isn't directly concerned with casual copying, but that does give Microsoft the ability to squeeze many more dollars out of us. For businesses the quid pro quo of not having to submit to WPA is participating in one of Microsoft's volume licensing schemes, and doing so could be seen as the equivalent of putting your head in a noose.

Retail copies of software have the vitrtue of anonymity, whereas if you put your foot onto the Microsoft volume licensing escalator (the first step is as little as five copies), then Microsoft knows who you are, where you live, and how many copies you're supposed to be running. You therefore become eligible for one of those audits Microsoft has been getting more enthusiastic about lately; you'll have noted instances where audit victims have insisted that as far as they know they're entirely legit, but as the cost of proving it would be greater than paying up, they have paid up.

By making retail copies harder to deal with, Microsoft is also beating smaller businesses with a stick, encouraging them to go for volume licensing. That gets them into the net too, and allows Microsoft's enforcers to operate a lot further down the food chain than has so far been the case.

Lastly, by forcing more people into volume licensing deals Microsoft is putting greater channel power into its own hands, meaning it can call the shots and chop and change the Ts & Cs when it likes, without much opposition. Distributors, software dealers and resellers will have less power (and less retail sales too), and the scope for unofficial and semi-unofficial sales of Microsoft product will be massively decreased, while Microsoft will have an even greater lock on pricing than it already has.

So, troubled by WPA? Sorry friend, but actually you're just collateral damage... ®

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